Oil and gas drilling in the United States has used hydraulic fracturing techniques for more than 60 years. The Society of Petroleum Engineers estimates that more than one million fracturing procedures have occurred over that period. C. Cooper, Statement before the Committee on Science, Space and Technology (May 11, 2011). More recently, however, the practice of hydraulic fracturing has been the subject of charged rhetoric in media accounts, advocacy statements, and the courts. In response to the attention, Congress directed EPA to conduct a study of the relationship between hydraulic fracturing and drinking water, and in February 2011, EPA issued its draft study plan. In the past several weeks, EPA’s Scientific Advisory Board, the Department of Energy, and Congress have focused critical attention on EPA’s plan.
When EPA issued the draft study plan, it asked its Scientific Advisory Board (SAB) panel on hydraulic fracturing to review the draft. The panel has held two of three scheduled meetings to date, and on April 28, 2011, issued a draft review, which advised the Agency to narrow the scope of the study to focus on water discharges. “The SAB believes that EPA is taking on an enormous challenge with limited budget and within a very limited time frame.” SAB Hydraulic Fracturing Study Plan Review Panel, Discussion Draft, at i, 3 (Apr. 28, 2011), available at www.epa.gov/sab. The panel’s draft recommendations reflect their opinion that the “handling, treatment and disposal of flowback and produced water represents the most likely important route of exposure and potential for adverse impacts on drinking water on a national level.” Id.at ii, 6. Consequently, rather than conduct toxicity testing of fracking fluid components, the panel draft suggests that existing databases should be used for toxicity evaluation. Id. at 6. Also, the panel expresses concerns about EPA’s focus on case studies. “The SAB finds that the Study Plan overemphasizes case studies in the study approach, and underemphasizes the review and analysis of existing data and the use of scenario analysis.” Id.at 4. Further, the panel draft urges EPA to distinguish between fracturing and drilling practices. “Identifying potential impacts to drinking water resources that are associated with failure to employ best management practices may not be useful unless the linkage to those management practices is identified.” Id. at 15. Fundamentally, the draft panel report is skeptical of EPA’s ability to accomplish the plan’s goals on time and in a scientifically supportable manner.
The Department of Energy has also weighed in on EPA’s plans, both directly and indirectly. In comments on the plan, DOE expressed concerns about negative bias in the choice to study retrospectively only locations with alleged incidents, describing the plan as having “selective focus” on “negative outcomes.” Clean Energy Report, “DOE Urges EPA to Consider Broad Benefits of Natural Gas ‘Fracking’,” Mar. 4, 2011; see also Fuel Fix, “GOP, Texans Blast Planned EPA Study of Hydraulic Fracturing,” May 11, 2011. Indirectly, DOE’s establishment of its own advisory panel to review fracturing practices will impinge on EPA’s study. See DOE, Press Release (May 5, 2011). DOE’s charge to its panel seeks best practices recommendations for safety and environmental performance, but it is unclear how much new research the panel will recommend. Charge to Secretary of Energy Advisory Board Natural Gas Subcommittee to Examine Fracking Issues (May 5, 2011). Given a 90-day deadline for completion of the panel’s first phase, the panel will undoubtedly focus first on existing data.
EPA’s study plan has also received attention on Capitol Hill in hearings where a majority of state regulatory agency witnesses challenged the need for federal action. The Senate Environment and Public Works Committee heard testimony on April 12. Committee Chair Sen. Boxer highlighted the need for study in her opening statement. Statement of Barbara Boxer (Apr. 12, 2011). Dr. Robert Summers of the Maryland Department of the Environment commended Congress for directing EPA to conduct its study, calling the draft “a solid, comprehensive plan,” and noting Maryland’s intent to withhold drilling permits pending completion of a number of research activities. Testimony, R. Summers (Apr. 12, 2011). Oklahoma Corporation Commission Vice Chairman Jeff Cloud articulated an opposite approach, describing the successful oversight of fracturing in his state “[w]ithout the need for any federal intervention.” Testimony, J. Cloud (Apr. 12, 2011). Colorado Oil and Gas Conservation Commission Director David Neslin agreed. “Our experience, and that of other states, demonstrates how hydraulic fracturing and other oil and gas activities are most effectively regulated at the state level.” Testimony, D. Neslin (Apr. 12, 2011). Sen. Inhofe’s remarks further endorsed the competence of existing state regulation. Statement of James M. Inhofe (Apr. 12, 2011) (noting statements from more than a dozen states’ regulatory agencies that “hydraulic fracturing does not contaminate ground water”).
On May 11, the House Science, Space and Technology Committee held a more specific hearing to examine the study. Chairman Hall, in his opening statement, expressed his skepticism over the study’s ability to deliver scientifically sound results. “A study that does not quantify environmental risks using standard practices is useless to regulators and risk managers and as such, is a waste of taxpayer money.” Opening Statement, R. Hall (May 11, 2011). In her opening remarks, Ranking Member Johnson supported the study’s goals of developing more information on fracking practices. State regulator witnesses expressed varying views. Those with experience stated clearly that states can and do regulate hydraulic fracturing, and they criticized the draft EPA plan for omitting states’ expertise and information from the plan. Texas Railroad Commission Chair Elizabeth Ames Johnson concurred with the SAB’s draft recommendation of a narrower scope, to address “scope creep,” and reiterated many states’ position that states are already handling the regulation of gas drilling in an active and responsible manner. Director of Michigan’s Office of Geological Survey Harold Fitch described efforts of the Groundwater Protection Council in launching the Frac Focus website, which hosts a national registry of hydraulic fracturing chemicals and already includes information on more than 450 wells. He also outlined the ongoing efforts of State Review of Oil and Natural Gas Environmental Regulations, Inc. (STRONGER), a non-profit organization that has already completed reviews of fracking regulations in Pennsylvania, Ohio, Oklahoma, and Louisiana. In contrast, Secretary of the Maryland Department of the Environment Robert Summers again endorsed the EPA plan as a good step in a “strong state-federal partnership.”
Although the rhetoric has fueled federal moves toward stricter regulation, it remains to be seen whether significant change at the federal level will actually occur. DOE’s initial committee report is expected in mid-August, and EPA will not issue the first phase of results from its study until late 2012. While these studies have the potential for conflicting results, they also present an opportunity for E&P companies. Both agencies will request public comment during their evaluations, and companies should take advantage of these offers. Also, the window to provide scientific information to the SAB panel remains open, although it will soon close. In the meantime, state agencies will continue to be the primary regulators of natural gas drilling operations, and operators should look to their interactions with their state regulators to continue developing a solid record of compliance and best practices.